NEW DELHI: Former prime minister Manmohan Singh described demonetization as “organized loot and legalized plunder” provoking finance minister Arun Jaitley to retort that the previous UPA regime was marked by various scams related to the 2010 Commonwealth Games and allocation of 2G Spectrum and coal mines under his watch.
“Demonetisation has proved to be mere bluster to reap political dividends while the real offenders have escaped. I repeat, this was organised loot and legalised plunder,” Manmohan Singh said while addressing a gathering in Ahmedabad, Gujarat.
Jaitley hit back saying, “The UPA government presided over a state of policy paralysis with the country being off-radar of all world institutions. In contrast, there is not a single international agency which is not praising India’s reform measures and commitment for economic growth.”
The war of words erupted a day ahead of note ban’s first anniversary on November 8, which the Congress plans to observe as black day while the government will celebrate it as anti-black money day. Rahul Gandhi will protest in Surat on Wednesday while the Congress will take out nationwide marches.
Noting the stated objectives of demonetization like eliminating black money, terror financing and counterfeit currency had not been met, Singh said such coercive steps are ineffective to promote a less-cash economy. “We never took such a drastic measure because in our reasoned analysis, the costs of demonetisation always exceeded the benefits substantially,” he said.
“The fact that more than 99 percent of demonetised currency came back into the banking system, has punctured the government’s claims. There are also widespread reports of the rich converting their black money into white while the poor suffered,” Singh said further.
Jaitley defended demonetization saying it was an ethical and moral step. “What is ethically and morally correct is also politically correct,” the finance minister said in New Delhi, adding the November 8, 2016 decision achieved multiple objectives.
The finance minister claimed the Congress has been a status quoits party which could not take tough decisions in the interest of the country.
“The priority for the BJP is to serve the nation which is in contrast to the Congress’ which is to serve the interests of the family (Gandhi),” he said.
The former prime minister wondered who advised PM Modi on note ban.“I say it with immense pain and a sense of deep responsibility, that the 8th of November was a ‘Black Day’ for our economy, and indeed our democracy. I wondered who advised him to inflict such a reckless step on our nation, and whether any considered thought went into it,” he said.
Noting GDP growth rate dropped to 5.7 percent due to demonetization and every one percent loss of GDP annually costs the nation Rs 1.5 lakh crore, the former prime minister charged the NDA government did not learn any lessons and went ahead with GST which further wrecked the economy. “Instead of providing relief, as I had requested in Parliament, to the poor and marginalised, farmers, traders, and the small and medium businesses, who suffered the brunt of demonetisation, the government chose to inflict on them a badly designed and hastily implemented GST,” he said.
Mentioning that UPA’s Goods and Services Tax suggested a single tax capped at 18 percent and aimed to make life easier for businesses, Singh said the NDA’s GST had transformed into a complicated mess, with multiple slabs, and rates as high as 28 percent, along with additional cess.
“Compliance requirements have become a nightmare for small businesses. The unending notifications and changes, a repeat of the chaos of demonetisation, have caused needless confusion,” said the former prime minister.
The fear of tax terrorism has further eroded the confidence of businesses to invest, he said adding that growth in private investment was at a 25 year low.
“Good governance involves both the head and the heart. It pains me to say that the Union government has completely failed to do its duty on both fronts,” Singh said as he invoked Mahatma Gandhi and Sardar Patel, the two political giants from Gujarat.